FY2027 1Q got off to a strong start; H1 performance after the upward revision is the focus

In FY2027-Q1, consolidated sales were ¥61,051 million, up 23.5% year on year; operating profit was ¥2,042 million, up 132.8%; ordinary profit was ¥2,167 million, up 117.6%; and net profit attributable to owners of the parent was ¥1,424 million, up 41.7%. Based on sales and operating profit, the operating margin was approximately 3.3%, improving by approximately 1.6 percentage points from approximately 1.8% in the same quarter of the previous year. The company attributed the increase in sales and profit in 1Q to a recovery in demand and large project orders for FA systems, as well as increased demand for electronics, including data-center applications.

Progress against the full-year forecasts was 24.2% for sales, 27.2% for operating profit, 28.9% for ordinary profit and 23.7% for net profit. After one quarter, or one-fourth of the fiscal year, sales and net profit were roughly in line with the passage of time, while operating profit and ordinary profit were slightly ahead. In FY2027-H1, ¥126,000 million in sales, ¥3,750 million in operating profit and ¥3,000 million in net profit, representing a simple half-year run rate, will serve as reference thresholds for checking whether the lead in profit performance is maintained.

The FY2027 forecasts presented as of May 2026 were sales of ¥237,000 million, operating profit of ¥6,000 million and net profit of ¥4,700 million, but after 1Q they were raised to ¥252,000 million, ¥7,500 million and ¥6,000 million, respectively. The increases were ¥15,000 million in sales, ¥1,500 million in operating profit and ¥1,300 million in net profit, with the operating profit forecast increase equivalent to 25.0%. Accordingly, at the next results announcement it will be necessary to confirm not only high year-on-year growth but also the timing of orders supporting the upward revision and the sustainability of demand from 2Q onward.

The 1Q materials did not disclose orders received, order backlog, a breakdown of unit prices and volumes, details of cost of sales or SG&A expenses, or the amount of risks incorporated into the earnings forecasts. Although the company mentioned higher SG&A expenses due to rising personnel costs and strategic investment, the monetary breakdown between gross-profit benefits from higher sales and higher expenses was limited. In FY2027-H1, close attention should be paid to whether FA and electronics orders and sales continue to grow in 2Q alone, whether the operating profit progress rate reaches 50% after the upward revision, and whether the full-year forecasts are maintained.